To succeed as a buyer in today's market, it's important to understand which market trends will have the biggest impact on your home search. Danielle Hale, the chief economist at realtor.com, says there are two factors every buyer should look out for:
“Going forward, the terms buyers face depends mainly on two things: the rate mortgage and housing supply.
This is an overview of each category.
Mortgage rates expected to increase in 2022
As a buyer, your interest rate directly affects how much you'll pay for your mortgage every month when you buy a home. Rates start to rise and experts predict they will continue to rise in 2022
More Homes Are Expected To Be Available This Season
The other market condition buyers need to monitor is the number of homes available for sale today. The latest Existing Home Sales Report from the National Association of Realtors (NAR) shows the current supply of inventory sits at just 2.4-months. To put that into perspective, a 6-month supply is ideal for a balanced market where there are enough homes to meet buyer demand.
However, there may be good news for buyers who are waiting for more options. A recent realtor.com survey shows more sellers are planning to list their homes this winter, meaning more choices will likely be available soon.
What Does That Mean for You?
Even if your options improve some this season, it won’t significantly shift market conditions overnight. According to NAR, many more listings need to be available to move closer to a more neutral market:
“Given the average monthly demand . . . , 3.55 million homes should be on the market to meet a level of inventory equal to six months of demand, implying a shortage of homes for sale of 2.24 million.”
So remember, even with more homes expected to come to market this season, competition among buyers will remain fierce as there still won’t be enough homes for sale to meet the current demand. That means you’ll need to act quickly when you’re ready to make an offer.
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